Report: Apple's AppStore Leaves Rivals In The Dust

According to the report, Apple's iTunes-based AppStore for the iPhone and iPods is "miles ahead" of competing application marketplaces like Ovi by Nokia and the Android Market from Google Android and the Open Handset Alliance.

Mobile application stores have become a staple for device manufacturers and software providers, offering a repository where users can purchase applications and enabling developers to submit applications for free or for purchase to smartphone users. Apple was first with a widely used application store with its AppStore offering. The others quickly followed. BlackBerry's Application Store Front is expected in March. Palm's Software Store is also expected soon, while Microsoft announced its entrance to the application store arena at the Mobile World Congress in Barcelona, Spain, last month.

According to GIA's analysis, Apple's AppStore won out in several categories including timeliness, number, variety and appeal of the applications available for users to download to their smartphones and mobile devices.

GIA ranked the mobile applications stores along five parameters: time to market, the ability to attract developers, the rate of device adoption, the efficiency of the interface and user experience, and having a critical mass of attractive applications.

"Competition among handset manufacturers and operators is intense, with different market players rushing to add features related to 3G and 3.5G connectivity," Erwin Baumgartner, head of GIA's Information Technology Practice in Asia-Pacific, said in a statement. "Features include multimedia tools, GPS location-based services and initial tests for Near Field Communication. Market players have been taking different approaches to nurturing and consolidating their application ecosystems, some of which have been more successful than others. Applications can make all the difference, and manufacturers like Apple, who see the smartphone more as a software platform than as a set of hardware features, have the ability to position themselves miles ahead of the competition."

Among the application stores from Apple, Android and Nokia, and soon-to-be-released stores from Microsoft, BlackBerry maker Research In Motion and Palm, Apple emerged the strongest "based on its early presence as well as the number, variety and appeal of applications available," the report noted.

Apple has amassed more than 15,000 applications in its AppStore since its July 2008 launch. Applications range from entertainment and utilities to productivity and educational apps. Games, too, are a dominant application for Apple.

"The store is a strong community-building tool for Apple and will contribute to iPhone adoption rates," the report said. "Though procedures are straightforward, some developers note a very rigid and lengthy authorization process when submitting new applications for the platform. Apple's tight grip on the approval process and the software developer kit might deter some developers from tailoring their applications for the Apple store."

In Android's case, the Android Market is being held back by the lack of devices, while Nokia's Ovi needs to line up developers and applications before its launch, the report said. Microsoft, with its recently unveiled Windows Mobile-based Skymarket application store, "will have to take care of legacy fragmentation and release more concrete plans on when the release of its marketplace will happen," the report noted. And BlackBerry will have to focus on transforming the perception of its devices form a pure business focus to fully functional multimedia smartphones with cool applications. Similarly, Palm needs strong momentum, followed by the launch of the Palm Pre in January, to quicken the pace of getting the device out and matching the applications ready for consumers.

Based on GIA's five criteria, Apple bested each competing application store, with the Android Market and Nokia's Ovi tying for second place. Apple received a rating of "strong" for time to market, attractiveness to developers, the interface and user experience and the variety of applications available. The only category where Apple lagged, getting a ranking of "medium," was for device adoption and rollout.

Microsoft ranked third, falling short for time-to-market, attractiveness to developers and user experience. BlackBerry's Applications Store Front placed fourth, lacking in number, variety and appeal of applications, and time-to-market. And Palm's yet-to-be-released WebOS Software Store ranked dead last, earning a "weak" designation in most categories based on GIA's assessment and expectations.

"Overall, Apple scores the highest, ahead of Android and Ovi," Baumgartner added. "Newcomers such as RIM and Palm have yet to show that their storefront launches will drive success for their platforms. Veteran Microsoft has to reinvent and redesign their current setup of mobile application distribution in order to keep up with the pack. Industry players have to look closely at how and where an application marketplace fits within their own strategies. Some intend to generate revenue, some plan to strengthen the user community, and some even work to create a demand pull for the corresponding handset brands and models. Furthermore, mobile carriers need to be convinced that these marketplaces will work more efficiently at a platform level, not at an individual operator level."